VAT is a multi point levy where the tax paid on local purchases from the registered dealer can be set off against the tax payable on the sale of goods,other than special goods.

2. How is the method of calculation of determining the tax liability under the present Sales Tax system different from this method ?

In the present Sales tax system, tax liability of a dealer for a particular period is determined using the multiplication method i.e. The taxable turnover of a dealer for a particular period is multiplied by the rate of taxapplicable to that turnover. In VAT, the method adopted is Input Tax Credit method as stated above. This is the only difference between the present Sales Tax system and the VAT.

3. What are the taxes that will be replaced by VAT?

General Sales Tax, Resale Tax, Surcharge, Additional Sales Tax will be replaced by VAT. The Central Sales Tax Act, 1956 regulating the inter-state transactions of sale and purchase will continue. The Entry Tax on Vehiclesand Goods will continue.

4. What are rates of tax under VAT?

The rates are 1%, 4% and 12.5% on goods eligible for input tax credit.

5. Is there any special rate of tax other than above 3 rates?

Yes. There are special rates of tax on certain goods which are kept out of VAT. No input tax credit is allowable for these goods.(e.g) Petrol

6. Who are dealers under VAT?

A dealer is a person who purchases, sells, supplies or distributes the goods in the course of his business for valuable consideration. The VAT Act includes:

(1) Local authority, Company, Hindu undivided family,Association of persons, Firm (2) Casual trader, factor, commission agent, delcredere agent, auctioneer, local branch of the firm or company situated outside the State(3) Person who effects transfer of property in goods other than by way of sale (4) dealer in hire purchase, works contract, person who transfers right to use the goods(5) Dealer in eatables including food and drinks (ie., hotels, restaurants and sweet stalls).(6) Port Trust, Railway Administration, Shipping, Transport andConstruction Companies, Air Transport Corporation andAirlines. (7) Any person holding permit for transport vehicles (8) Tamil Nadu State Road Transport Corporation(9) Customs Department, Insurance Company, AdvertisingAgencies (10) Corporation or Companies of State and Central Governments

7. Who are liable for Registration?

1) Those dealers whose total turnover in respect of purchase and sales in the State is not less than Rs.10 lakhs for a year are to get registered under the Act.

2) The other dealers whose total turnover for a year is not less than Rs.5 lakhs shall get registered.

4) Those dealers who intend to commence the business, on option, may obtain registration.

8. What is the Registration fee?

The registration fee is Rs.500/- for principal place of business and Rs.50/- for each additional place of business. (Branches, Godowns). No Security Deposit is necessary for Registration, for dealers. There is no renewal of registration under VAT and it is permanent till it is cancelled by the Department or on stoppage of business when reported by the dealer. No security deposit is necessary for Registration.

9. Who is the registering authority?

Head of the assessment circle in whose jurisdiction the dealer’s principal place of business is situated.

10. What is TIN?

The registration number allotted to the dealers is popularly known as TIN i.e. Taxpayer Identification Number. This is a eleven digit number to be quoted in all VAT transactions and correspondence

The Input Tax Credit (ITC) of full amount of input tax shall be allowed to every dealerliable to pay tax in respect of capital goods purchased on or after the date on which dealer becomes liable for paymet of tax, if such goods are to be used in manufacture of any taxable goods except non-vat goodsand where such manufactured goods are sold within the state, in the course of inter-state trade or commerce or in the courcse of export of goods out of the territory of India or transffered or consigned outside the State otherwise than as a result of a sale.

Dear Sir, would like to know, payment method of registeration fees.Is it payable at any bank branch. Say, if it is for UP VAT registeration and i want to pay registeration fees from Mumbai..how to do it? Also what documents are necessary to carry along with?

Also how to find circle office? can we go to any office location within UP for documents submission or to district office only? please guide...

Sir, I wnat to change my sales tax authority from Kanpur to Noida . I have Registered office and warehouse at kanpur and manufacturing Plant at noida. I want toshift my sales tax territories from kanpur to Noida. please let us know the procedure i have to follow. Please brief me detail regarding change the sales tax office and procedure i have to follow